The ECB leaves its key rates unchanged, net purchases of PEPP assets will evolve at a slightly slower pace compared to the last two quarters – Investing

To be continued, the press conference of Christine Lagarde, president of the BCE, live on our site:

2:34 p.m. Christine Lagarde: “The current rise in inflation is largely temporary (…) The labor market is improving rapidly; consumers are cautious. “

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2:07 p.m. Andrew Kenningham, Chief Economist Europe at Capital Economics

“The main change to today’s policy statement is that instead of reiterating its commitment to make PEPP asset purchases at ‘a significantly higher rate than during the first months of the year‘, the ECB now plans to buy at a rate’moderately inferior‘to that of the two previous quarters. We believe this will translate to PEPP purchases of around € 70 billion per month, compared to over € 80 billion per month between May and July (and less in August). This would mean total purchases of 90 billion euros per month, including the 20 billion euros per month under the APP in the next quarter. Such a change will have a negligible impact on the overall financing conditions. “

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1:45 p.m. Unsurprisingly, the European Central Bank has maintained its key rates as is. The deposit facility rate is maintained at -0.5%.

” Based on a joint assessment of financing conditions and inflation outlook, the Governing Council considers that favorable financing conditions can be maintained with a slightly slower pace of net asset purchases under the program. of emergency purchases in the face of the pandemic (Pandemic emergency purchase program, PEPP) compared to the last two quarters », Indicates the ECB in its press release.

” The Governing Council will continue to make net asset purchases under the PEPP, the total envelope of which is € 1.850 billion, at least until the end of March 2022 and, in any case, until the end of March 2022. to what he considers that the coronavirus crisis is over She continues.

For Frederik Ducrozet, at Pictet Wealth Management, this corresponds to an amount reduced from 80 billion euros to a range of 60-70 billion, as expected.

“Moderately lower pace” of PEPP purchases than in the previous two quarters, ie roughly € 60-70bn as expected. https://t.co/PlONNt9mvI

– Frederik Ducrozet (@fwred) September 9, 2021

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Hello everyone, we are starting this live as we approach this week’s major stock exchange meeting, that of the European Central Bank’s monetary decision. The institution makes its monetary policy decision at 1:45 p.m. and its president, Christine Lagarde, will speak from 2:30 p.m. for her traditional press conference.

Before this intervention, the governors of the ECB will have debated on the orientation on the monetary policy of the central bank, in particular on the thorny question of the amount of purchases of financial assets within the framework of the emergency plan put in place for support the economy during the Covid-19 pandemic (PEPP). Some would like to see it decrease in the coming months due to inflation. But the ECB is divided. New forecasts for growth and inflation in the eurozone will also be unveiled.

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To read, before the first announcements, the article of Philippe Wenger, head of the Economy department at Invest :

High-risk meeting for the European Central Bank and Christine Lagarde

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And, below, the comments and opinions of strategists and market analysts concerning their expectations within the framework of this monetary meeting;

Véronique Riches-Flores, economist and president of Riches Flores Research:

“The upward revision of the inflation scenario for 2021 and, perhaps even more so, 2022 does not suggest that the ECB can maintain its very accommodating posture of the spring. Purchases under the PEPP have already been slowed down since the end of July, unlike the commitment in the last press release according to which they would continue ‘at a much higher rate during the current quarter than during the first months of the year‘. Suspense … “

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Axel Boot, Ostrum Management strategist

” In Europe, the news focuses on the next ECB committee. Comments from Robert holzmann or Klaas Knot wanting a PEPP capping caused quite a stir in the Bund. Christine Lagarde also agrees on the need to further target the action of the central bank after the deluge of liquidity decided in spring 2020. The fight against climate change requires reorienting purchases by greening the interventions of the ECB. The President of the ECB will undoubtedly launch the reflection this week before expressing her strategy next December. “

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Christopher Dembik, director of macroeconomics and strategy at Saxo Bank

“We are joining the consensus in not anticipating any change in monetary policy at this week’s Governing Council. The overall financing conditions appear to be very favorable. This opens the door to a slowdown in monthly purchases under the European Recovery Plan (PEPP) in the fourth quarter, from 80 billion euros per month to 60 billion euros per month – with little impact on the market. . ECB doves, like chief economist Philip Lane, are likely to downplay the importance of this announcement. We also expect the ECB to revise its teams’ projections upwards, given the positive economic momentum in the eurozone this summer. “

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John plassard, Mirabaud investment specialist

“At this point in the economic cycle and especially the evolution of the Delta variant, it is very unlikely that the ECB will announce a change in its asset buyback program (APP and PEPP) at the next meeting on September 9. We will certainly have to wait for the evolution of the pandemic to become clearer, for the vaccination campaign to advance and for the budgetary plans of European countries for 2022 to be published. “

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Neil MacKinnon, VTB Capital

“The ECB’s monetary policy recently incorporated two innovations linked to the forward guidance on interest rates. First, the ECB has fine-tuned its price stability target to a symmetrical inflation target of 2% over the medium term. Second, a conditional commitment to consider the implications of the effective lower bound – especially in a world of zero or exceptionally low interest rates. The ECB is keen to avoid a ‘premature crunch‘, which implies that it could tolerate an overrun in inflation – but by how much and for how long is not something the ECB has specified. The ECB expects, as highlighted in its recent economic bulletin, that wage pressures will remain low in the euro area and that compensation per employee will be just below the long-term average of 2% in place since 1999. “

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Holger Schmieding, chief economist at Berenberg Bank

” While the ECB could modestly moderate the pace of its emergency asset purchases in the [quatrième trimestre], we do not expect the central bank to announce when and how it will phase out its large ‘Pandemic Emergency Purchase Program’ (PEPP) and if and to what extent it will step up its modest standard program of asset purchase (APP) and make it more flexible. These key decisions, which are shaping up to be highly controversial, will likely be postponed until the December meeting. “.

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Frederik Ducrozet, ECB observer at Pictet Wealth Management.

“On a prospective basis, it is unclear how much more positive the ECB can become amid lingering concerns about the Delta variant, the Chinese slowdown, the reduction in the Fed or bottlenecks on the supply side. “

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Paul Hollingsworth, Chief Economist Europe of BNP Paribas

“We reiterate our long-term vision that there will be no cliffs in political support beyond the end of the PEPP, with the ECB likely to announce an APP that is both larger and covers some flexibilities. “

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Gilles Moëc, Group Chief Economist at Axa Investment Managers, for CNBC

“I anticipate they will probably do it in December. I think they want to give themselves time and have new forecasts. “

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Guillaume Menuet, European economist at Citi

” If PEPP purchases can go down significantly I think it’s a bit premature, I think we will have an indication that PEPP purchases still remain very high throughout Q4 before decreasing in Q1. “

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Chiara Zangarelli, European economist at Nomura, for Reuters

No matter when the PEPP might come to an end, it is not the end of the ECB’s role in terms of QE. That’s why we don’t need a huge delay to think about it. Of course, we can’t just leave it there for too long either. But six months is a lot. In the fall, we will have to resolve many issues related to the outlook for 2022. ”